A NATION CHALLENGED

A NATION CHALLENGED; U.S. Moves to Seize Saudi Charity Assets

Published: March 12, 2002

WASHINGTON, March 11—
In coordination with the Saudi government, the Bush administration moved today to seize the assets of a Saudi charity group, asserting that the organization uses the cover of supporting Islamic schools and orphanages to funnel money to terrorists.

The crackdown was the first since Sept. 11 to result from a joint effort by the United States and Saudi Arabia. Administration officials said it was a sign of increasing cooperation with the kingdom, which was home to 15 of the 19 hijackers involved in the terrorist attacks and which the United States feels has been slow to take action against suspected supporters of Osama bin Laden and other terrorist organizations.

''We take a new step in the war on terrorist financing, making our first joint designation of a financial supporter of terrorism,'' Treasury Secretary Paul H. O'Neill said today.

The action takes aim at Al-Haramain Islamic Foundation, which is based in the Saudi city of Riyadh and has branches in 50 countries. Mr. O'Neill said the government believed that the Bosnian and Somali branches of Al-Haramain diverted money collected for charity to support terrorist activities.

A Treasury official said today that the order would affect only the charity's branches in Somalia and Bosnia. He did not provide details of how much money was involved, whether any funds had been seized, or whether any individuals had been arrested. He also declined to provide evidence.